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Focus Magazine

Focus Magazine

January/February (Vol. 36/1)

The 2007 Subprime Lending Experience: Picking Up the Pieces

by Wilhelmina A. Leigh and Danielle Huff

The 2007 subprime mortgage market collapse is likely to disproportionately harm African Americans and Hispanic Americans and may ultimately reverse the gains in homeownership these two subpopulations have made since 1995. Although homeownership is a core component of the American dream, this dream has persistently remained out of reach for many African Americans. In 1940, when close to half (45.6 percent) of white Americans owned homes, less than a fourth of African Americans (22.8 percent) were owners. It was not until 2000 that the African American homeownership rate (46.3 percent) surpassed the white rate of 1940. At that time, though, the white homeownership rate exceeded 70 percent. In other words, homeownership acquisition among African Americans lags homeownership acquisition among whites by roughly 60 years.

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Did You Know?

In 2006, blacks made up 22 percent of the U.S. Army overall, but comprised only 12.3 percent of the officer corps and between seven and eight percent of the combat arms officers. The combat arms branches represent the principal pipeline to the Army's senior ranks. In 1990, blacks were 29.1 percent of the Army, but only 11 percent of the officer corps.

Source: Lt. Colonel Anthony D. Reyes, Strategic Options for Managing Diversity in the U.S. Army, Joint Center for Political and Economic Studies, June 2006